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Becoming involved in your community and having a vested interest as a member of the HOA could result in a great opportunity for you. Reach out to your friend with a vested interest in their HOA who can also give you a recommendation.

Getting in front of prospects is one of the most important and challenging aspects of your business. There are multiple ways to go about prospecting, and I urge you to get creative. Many different markets need your service; they just don’t know how you can help them because you haven’t been able to show them. Niche markets can provide you with unique sales opportunities. The commission these sales
generate will open up more marketing opportunities for you, and suddenly your business is growing.

A new market that you may have not have considered until now is the homeowners association or HOA. This market isn't easy to find or to market to in large numbers, but it may be a great market for you if you belong to a homeowners association already or if you live in a retirement community.

I have found in my area that our homeowners association has a large amount of money in reserve savings from the dues it is collecting each month. In fact, our dues are going up again this upcoming year and the notification letter stated it was to be sure there is plenty of cash available in reserve. The dues we pay cover some maintenance expenses as well as some services, but the majority of the dues are put into reserves. This money needs to be 100 percent liquid at all times because they need access to use the money for potentially large repairs like a new roof or to repair structural damage as the buildings age.

Once I identified this potential opportunity, I found out that the money in my association reserve account was sitting in a savings account earning nearly nothing (0.395 percent). I decided to join the next financial meeting and speak up, offering a solution to allow liquidity, but also to have the opportunity to accumulate more interest. The board members were interested and explained their options.

By using a return of premium (ROP) we are able get the association a better return, guarantee it will never lose value, allow for penalty-free withdrawals and, if needed, 100 percent return of the initial premium. With several ROP products available today, there were a few options to consider.
When working with HOAs, it is important to use a carrier that allows a non-individual owner. A signing board member (preferably older than 59 1/2) will be the annuitant and then the homeowners association will be the owner of the contract. It is preferable to have an annuitant older than 59 1/2 since withdrawals are based on the age of the annuitant in lieu of the non-individual owner. This allows for liquidity through penalty-free withdrawals as well as return of premium with no IRS penalty.

Depending
on the amount in reserve, we will want to place this into a few different contracts. Identify the minimum premium of the product you are using and write multiple contracts. This helps to maintain the interest earned on the other accounts in case the HOA needs to access some but not all of the money with the return of premium feature. This will allow the other contracts to keep accumulating interest. In time, as the HOA needs to access money, the return of premium feature may not even be necessary; the surrender value could be higher than the original premium amount because the interest earned will hopefully have exceed the surrender penalties, or 10 percent penalty-free withdrawals may be sufficient.

Becoming involved in your community and having a vested interest as a member of the HOA could result in a great opportunity for
you. Also, keep in mind that if a property management company is involved in your HOA, they may work with several other HOAs as well and could potentially get you introduced to other associations in your area. Reach out to your friend with a vested interest in their HOA who can also give you a recommendation. I wish you the best in identifying new markets.

About the Author

Allison is a veteran annuity marketer having worked in this field full-time since graduating from Iowa State University in 2005 (BA Marketing, BA International Business). In the last eight years she has been a part of two elite marketing organizations. As a Senior Business Developer she quickly g... More